On October 15th, the Social Security Administration will officially announce the exact figure by which all benefit amounts will be increased in the new year. This increase is called the Cost of Living Adjustment, or COLA. The COLA is an increase implemented to all benefit amounts on a yearly basis in order to counter the effects of inflation.
While the Social Security program does allow for seniors to rest easy knowing that they will have financial security throughout their sunset years, living on a fixed income can be tough to navigate when costs continue to rise seemingly infinitely. For this reason, the SSA has been implementing the COLA to all benefit amounts on a yearly basis since 1975. Here is everything you need to know.
Social Security COLA
Throughout the year, Social Security experts often share early predictions for the next COLA using the CPI data available to date. The Senior Citizen League (TSCL) has projected a 2026 COLA of 2.7% based on the August data as released by the Bureau of Labor Statistics. Independent analyst and Social Security expert Mary Johnson has updated her estimates for the 2026 COLA from 2.7% up to 2.8%.
If TSCL’s projections hold steady, seniors receiving the average benefit check amount of $2,008 will see a $54 bump to their benefits in the new year, bringing their total up to $2,062. This figure is still, of course, subject to change as the last leg of the third quarter progress, however, it does seem unlikely that the COLA will be lower than 2.7% due to the effects of the tariffs and trade policy.
The COLA is determined by taking the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year and measuring it against the third quarter CPI-W of the previous year. If there is a year over year increase, this figure becomes the next COLA. The Bureau of Labor Statistics will release the third quarter CPI-W for 2025 at 8:30 a.m. on October 15th and the SSA will announce the 2026 COLA later that evening.
2026 COLA may fall short
If the estimates for the 2026 COLA hold steady and the average benefit is increased by $54, some seniors may not even see the full 2.7% increase reflected in their benefits for 2026. This is because along with the COLA increase, Medicare premiums are also projected to rise significantly in the new year, According to the latest report from the Medicare trustees, the Part B premium will be increased by 12% next year, bringing the total up from $185 to a little over $207. Since Medicare Part B premiums are automatically deducted from Social Security benefits, enrolled seniors will have to say goodbye to a fraction of their COLA increase before it even reaches their bank accounts.
Medicare increases aside, many seniors are already feeling frustrated with their benefits, claiming that inflation grows significantly faster than their benefits do, according to a study conducted by TSCL. The issue here lies with the CPI-W as it prioritizes the spending habits of a vastly younger cohort (i.e. those currently in the workforce), and as a result, the COLA does not effectively counter the effects of inflation felt by seniors with differing spending priorities.
According to TSCL Executive Director Shannon Benton, “Many seniors believe inflation is much higher than the COLA estimates. For example, TSCL’s estimates that about 80 percent of seniors believed inflation in 2024 was substantially higher than the 2.5 percent COLA implemented to make up for it at the beginning of 2025.”
“Seniors across America are holding their breath as we wait for the official COLA announcement in October. Our research shows that about 39 percent of seniors depend on their benefits for all their income, so the COLA announcement has a direct effect on their quality of life,” Benton also noted.